Kon-Boot Lets You Bypass Logon for Windows and Linux

Kon-Boot looks like a very interesting tool since it can get you into a system without having to logon first.

According to the description at the tool's site, Kon-Boot alters a Linux or Windows kernel on the fly during boot up. The result is that you can login to a system as 'root' or 'administrator' without having to know the associated account password.

From my testing on a Windows XP computer which is part of a domain, you can only use a local user account, not an AD account. This is why you locked your AD account out. Try it against a local account and it should work fine. Another caveat is that you need to know the name of at least one local user account to access the system; however, there are ways to find this out before hand if you don't already know. (Ex. Offline NT Password & Registry Editor, ERD Commander)

Hmmm - booting up using the .iso left me with a blinking cursor the first time, and a blinking "ERR" the second time, all while I received an alert my AD account was now locked out. Are we sure this thing does what it says it does?

As a systems administrator with a background in software engineering, my response to this article is - quite frankly - "oh please."
It is a fact that you do not need to alter the kernel to bypass a logon - just the boot sequence, which is as easy as pie if you are a programmer.
If I'm booting an ISO CD from the console, I can bypass the security anyway. I can gain root access regardless of the operating system being used by booting from a CD, as long as I know how to read the underlying filesystem.
No special programming is even required for such a feat. That is why encrypted filesystems were created in the first place.